Do it yourself

I have been married for more than two decades now. In all these years I have deliberately maintained a safe distance between my personal and professional life. My wife Anandi, a post graduate in Hindustani Classical music and an amateur poetess has never shown any interest in the matters relating to finance. She finds it too “dry and mundane”. Last few days though have been a little different. To my surprise, Anandi herself started a discussion on stock market. At once, I could not fathom why she would be suddenly interested in what she always believed to be the mired world of finance and investments. But soon I realized the catalyst of this change- it was her cousin brother Anuj, who has apparently lost heavily in the recent collapse in the stock market. We had a long discussion last evening. I am sharing the following excerpts from our discussion with readers. I believe many may find it relatable and useful. “ Anandi (in an unusually hoarse voice): What are these small and midc...

A lot of people have enquired about the dichotomy in the market, i.e., the benchmark indices are ruling close to all time high levels, while not many portfolios have returned positive returns during 2019. I would say, the return of a portfolio of equity stock is function of its construct and efficiency of management. The returns may vary dramatically depending upon the stock selection and quality of the management. So it would not be fair for me to comment on the performance of any particular portfolio. Nonetheless, the following data points may be pertinent to note in this context. (a)    At Tuesday closing level, Nifty is higher by 9.2% YTD. But, the market capitalization of NSE is higher by ~4% during this period. Given that Nifty represents about 70% of the total market cap, it is safe to assume that most of the companies outside Nifty have lost their value during the year. Moreover, 28 of the 50 constituents of Nifty have yielded negative retu...